US posts record $738 billion budget deficit in April

FILE PHOTO: A US five dollar note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration

The United States on Tuesday reported a record $738 billion budget deficit in April, as an explosion in government spending and a shrinking of revenues amid the novel coronavirus pandemic put it deeply into the red.

The Treasury Department said the budget deficit last month was the first to reflect the enormity of government spending that has been authorised to try to mitigate the economic impact of the crisis, which until recently saw most of the country under strict lockdown orders and many businesses shuttered to contain the spread of the virus.

The US Congress approved a $2.3 trillion rescue package on March 27 and has since added to it, taking total emergency relief spending to around $3 trillion. April marked the first month some of those stimulus programs were begun to be paid.

April is usually a month in which Treasury posts a surplus because tax payments are due on April 15, but they have been delayed this year until July 15 due to the pandemic. The government has only reported an April deficit 15 times over the past 66 years, Treasury said.

More than 33 million Americans have filed for unemployment benefits since March 21, which equates to roughly one in five jobs, cratering the US government's revenue base.

"They really are striking numbers that I didn't think I would ever see," a senior US Treasury official told reporters when asked about the monthly figure, which was also an all-time record budget deficit for any month.

About $283 billion in non-withheld individual income taxes were paid in April 2019, according to Treasury data, and receipts for taxes withheld from worker paychecks, which totalled $114 billion in April 2019, were reduced this year by the jump in unemployment.

In April, receipts totalled $242 billion, down 55% from a year earlier, while outlays surged 161% to $980 billion. The fiscal year-to-date deficit surged to $1.48 trillion compared to a $531 billion deficit in the comparable period in 2019.